While Nepali leaders have committed time and again to the Belt and Road Initiative, China’s flagship foreign policy initiative led by President Xi Jinping, officials said little progress has been made in the last five months towards negotiating the projects identified by the Nepal government.
Government officials said negotiations for around three dozen projects that were submitted to the Chinese side during Prime Minister KP Sharma Oli’s official visit to China in June are being delayed. Even though some Chinese-funded projects, mostly on the reconstruction of damaged heritage sites and buildings, have gained momentum in recent months, no concrete discussion has taken place when it comes to the Belt and Road projects.
Nepal signed a bilateral agreement with China to become a part of the initiative in May 2017, and subsequently formed two committees led by the foreign and finance secretaries to identify projects for negotiation with the Chinese side. The finance secretary-led team had listed 35 projects to be developed under the initiative.
Finance and other line ministries have been directed to finalise the investment and financing modalities for the listed projects before the foreign secretary-led panel forwards it to Beijing for talks.
“Before negotiations, we have to make our position clear on the financing modality, that is, whether these projects should be developed with loan or grant,” a Finance Ministry official said. “Since we are still unclear about the financing and investment modality, we are facing delays on kick-starting negotiations with the Chinese side.”
Two officials spoke to the Post on condition of anonymity because they weren’t allowed to discuss the details with media. Officials in Kathmandu and Beijing said that during his official meeting with Chinese Premier Li Keqiang in Beijing, Oli in June read out the list of 35 projects identified by Nepal for the Belt and Road Initiative, seeking Chinese support for executing them under various investment models.
“But I doubt whether the list presented by Oli was exchanged with the Chinese side,” said an official privy to the visit.
“The prime minister only read out the list without exchanging it, so the Chinese side may not have taken it seriously.”
A senior Finance Ministry official said Oli specifically proposed projects related to infrastructure, energy and power, upgrades for the north-south corridors, free trade areas, and construction of integrated check posts at various Nepal-China border points. The total investment sought for the projects is around $10 billion.
Nepal had marked Budhi Gandaki hydroelectricity to be developed as the first project under the Belt and Road Initiative but the Sher Bahadur Deuba administration delisted it later.
Leela Mani Paudyal, the Nepali Ambassador to China, said some progress has been made following meetings with the Chinese side on energy, physical infrastructure and transportation projects. “Each ministry has a project related to the initiative as their focal point. The embassy in Beijing is not involved in each and every step of negotiations,” he clarified.
But a spokesperson for the Foreign Ministry said the ministry was involved only at the last hour of project negotiations. “All the responsibility of identifying investment and financing models is handled by the finance and other line ministries where the project originated,” said Rambabu Dhakal, the assistant spokesperson. “Our role comes at last during final negotiations so we are not much updated on the status of projects under the initiative.”
Officials from the two countries completed negotiations last month on the Protocol to Transit and Transport Agreement and held one round of talks on the feasibility study for the Kerung-Kathmandu railway. Officials also concluded a meeting for the Nepal-China Joint Implementation Mechanism on energy cooperation.
The Chinese government has set up an office in Kathmandu, named Commercial Counselor’s Office, with representatives from its Commerce Ministry to deal with Nepal on Beijing-funded projects.
projects floated under the Chinese scheme
- View Tower in Nagarkot
- Up gradation of Rasuwagadhi-Kathmandu road
- Korala-Pokhara road
- Kimathanka-Hile road construction
- Handicraft village in Humla, Simikot
- Exhibition centres in all seven provinces
- Multifunctional lab at Rasuwagdhi border point
- Free trade area in Betrawati of Nuwakot and Panchkhal, Kavre
- Construction of six ICPs in Pulang-Yari (Humla), Liji- Nechung (Mustang), Jilong-Rasuwa, Jangmu-Kodari, Reu-Olangchungola and Chentang-Kimathanka
- Karnali corridor (Jamunaha-Hilsa)
- Gandaki corridor (Belhaiya-Korala)
- Thori-Kerung corridor
- Kodari-Birgunj corridor
- Koshi corridor (Rani-Kimathanka)
- Bhittamod-Lamabagar-Lapcha corridor
- Mahadevkhola rainwater harvesting project
- Groundwater possibility in Kathmandu at Chandragiri
- Galchi-Rasuwagadhi-Kerung 400 kv transmission line
- New city at Bheriganga, Surkhet
- Kathmandu Outer Ring Road
- Sunkoshi Marin diversion multi-purpose project
- Mid-Tarai lift irrigation project
- Lift irrigation project in Panchkhal, Kavre
- Araniko Highway disaster and climate change project